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Comparative Trade Policy

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  • Magnus Wiberg

Abstract

Current research has found ambiguous theoretical and empirical results with respect to the effects of the type of electoral regime on trade policy. The present paper aims to reconcile the different views within a theoretical model. It is shown that the equilibrium level of trade protection can be relatively higher, as well as lower, under a majoritarian electoral rule compared with proportional representation. Trade policy is more (less) protectionist under proportional electoral regimes, as compared with majoritarian institutions, if swing districts are populated by relatively more (less) factor owners with stakes in the exporting sector. It is also shown that politicians optimally apply a lower (higher) level of rent seeking under the majoritarian electoral rule if there are relatively more factor owners in the swing districts with stakes in the exporting (import-competing) sector.

Suggested Citation

  • Magnus Wiberg, 2014. "Comparative Trade Policy," Review of International Economics, Wiley Blackwell, vol. 22(2), pages 410-421, May.
    • Handle: RePEc:bla:reviec:v:22:y:2014:i:2:p:410-421
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    File URL: http://hdl.handle.net/10.1111/roie.12088
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    References listed on IDEAS

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    1. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    2. Gene M. Grossman & Elhanan Helpman, 2005. "A Protectionist Bias in Majoritarian Politics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(4), pages 1239-1282.
    3. Scheve, Kenneth F. & Slaughter, Matthew J., 2001. "What determines individual trade-policy preferences?," Journal of International Economics, Elsevier, vol. 54(2), pages 267-292, August.
    4. Persson, Torsten & Tabellini, Guido, 1999. "The size and scope of government:: Comparative politics with rational politicians," European Economic Review, Elsevier, vol. 43(4-6), pages 699-735, April.
    5. H.J. Roelfsema, 2004. "Political Institutions and Trade Protection," Working Papers 04-06, Utrecht School of Economics.
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    8. Torsten Persson, 2005. "Forms of Democracy, Policy and Economic Development," NBER Working Papers 11171, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Aurélie Cassette & Etienne Farvaque, 2022. "American and Australian Tariff Policies: Do They Rock or Tango or Roll?," Sustainability, MDPI, vol. 14(20), pages 1-14, October.

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